Investing Strategies in Tropical Destinations (Nicaragua)

[Luke Wolmer]

I'm currently traveling in San Juan Del Sur, Nicaragua and I have came across some nice plots of raw land. At this stage I am looking at plots that are between 0.5-1.5 acres and I am wondering what investment strategies would be available to me:

Flip Raw Land: wait and hope that the land appreciates and sell it for profit at some point in the future. 

Build and Rent: build a unit or two on the land and rent it out via AirBnB or other vacation rental sites. This would be my preferred method.

Build and Flip: build a unit or two on the land and sell it

I would love to discuss:

• Experiences people have had with any of these methods abroad (Central America)
• Additional strategies people have used to turn cheap raw land into a solid real estate investment abroad (Central America)

[Julie McCoy]

There's lots I could say about this, but in a nutshell: if you're going to do it, know the market.  Nicaragua is politically unstable right now, which makes any investment fairly high-risk.  Sure, that could mean some great deals, but only if you know what you're doing (specific to that market) and can afford to sit on it for potentially a long while until things stabilize.

Re: building a unit or two and AirBNBing it... well, that might work.  But what do you know about building methods in the area?  Are there any restrictions on foreigners owning land?  What's the permit process (if any)?  Do you need to have utilities run, a well dug, septic put in?  How much might that cost?  Do you have the cash to fund it, or will you need a loan?  How might you get a loan in Nicaragua?  Do you have confidence in the quality of the local workmanship?  How are you going to monitor progress from (presumably) far away?  

That's just building the structure... once it's built, how are you going to manage it?  Do you speak Spanish?  Can you communicate well with the people you'll need to help you run the property, like a housekeeper and a maintenance person?  What sort of demographic are you targeting?  What's your likely occupancy, expenses, etc?

I'm not saying it can't be done.  But building something from scratch is a time-consuming and expensive endeavor in any circumstance, much less in a politically unstable foreign country.  I'd recommend starting your real estate journey with something a little less advanced. :)